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Medicare in Michigan

Michigan has long protected access to Medigap plans for Medicare beneficiaries under age 65

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Key takeaways

Medicare enrollment in Michigan

As of September 2020, there were 2,104,129 people enrolled in Medicare in Michigan. That’s nearly 21 percent of the state’s population, versus about 19 percent of the total US population enrolled in Medicare.

For most Americans, filing for Medicare benefits is part of turning 65. But Medicare coverage enrollment is also triggered for younger people if they’re disabled and have been receiving disability benefits for 24 months, or if they have ALS or end-stage renal disease.

When we look at nationwide Medicare enrollment, 15 percent of beneficiaries are under the age of 65. It’s a little higher in Michigan, where 17 percent of Medicare beneficiaries are eligible due to disability rather than age. On the high and low ends of the spectrum, 22 percent of Medicare beneficiaries in Alabama, Arkansas, Kentucky, and Mississippi are disabled and under age 65, while just 9 percent of Hawaii Medicare beneficiaries are eligible due to disability.

Original Medicare in Michigan

Enrollment in Original Medicare (Medicare Part A, for hospital coverage, and Part B, for outpatient/physician coverage) is the same in every state, and is done via the Social Security Administration. Medicare Part A and Medicare Part B benefits do not vary from state to state, and the coverage can be used anywhere in the country.

So your Medicare eligibility in Michigan will follow the same federal guidelines that are used nationwide. But if you want supplemental coverage or would prefer to get your primary Medicare coverage from a private health insurance company, your options for Medicare Advantage plans, Medicare Part D plans (prescription drug coverage), and Medigap plans do vary from one state to another.

Medicare Advantage in Michigan

Private Medicare Advantage plans are an alternative to Original Medicare. It provides all of the benefits of Original Medicare (hospital and outpatient/physician coverage), although out-of-pocket medical costs can vary considerably from what they’d be with Original Medicare. Most Medicare Advantage plans also include Part D coverage for prescription drugs, as well as extra benefits like gym memberships and dental/vision coverage.

Time to sign up for Medicare?But Advantage plans tend to have much more limited service areas and provider networks than the nationwide access provided by Original Medicare. There are pros and cons to either alternative, and no single solution that works for everyone.

Medicare Advantage plans are provided by private insurers, and plan availability varies considerably across the country. Michigan’s Medicare Advantage market is robust, with at least 12 plans available statewide, and residents of some counties able to select from among more than 50 plan options.

As of 2018, 37 percent of Michigan Medicare beneficiaries had Medicare Advantage plans, which was similar to the nationwide average of 34 percent. But 1,014,632 Michigan Medicare beneficiaries were enrolled in private plans as of September 2020 (as opposed to Original Medicare; this does not count people with private plans to supplement their Original Medicare coverage), which amounted to about 48 percent of the state’s Medicare population. This mirrors the nationwide trend of increasing Medicare Advantage enrollment over the last several years.

Medicare’s annual election period (October 15 to December 7 each year) allows Medicare beneficiaries the chance to switch between Medicare Advantage plans and Original Medicare (and add, drop, or change to a different Medicare Part D prescription plan). People who are already enrolled in Medicare Advantage plans also have the option to switch to a different Advantage plan or to Original Medicare during the Medicare Advantage open enrollment period, which runs from January 1 to March 31.

Medigap in Michigan

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Original Medicare does not limit out-of-pocket healthcare costs, so most enrollees maintain some form of supplemental coverage. Nationwide, more than half of Original Medicare beneficiaries get their supplemental coverage through an employer-sponsored plan or Medicaid. But for those who don’t, Medigap plans (also known as Medicare supplement plans or MedSupp) will pay some or all of the out-of-pocket costs they would otherwise have to pay if they had only Original Medicare.

Michigan operates a state-based Medigap subsidy program for Medicare beneficiaries with modest income (no more than 225 percent of the poverty level) who purchase Medigap plans from one of five participating Medigap insurers in the state. This subsidy program is expected to continue until late 2022 or early 2023, or until funding is exhausted. The program was designed to help offset some of the rate increase that applied to Blue Cross Blue Shield Medigap plans in 2017, after a rate freeze on those plans was lifted (BCBS Medigap plans in Michigan were priced below market rates until 2017).

According to an AHIP analysis, there were 429,663 Michigan Medicare beneficiaries with Medigap coverage as of 2018. That’s about 36 percent of the state’s Original Medicare beneficiaries (Medigap plans cannot be used with Medicare Advantage plans).

Medigap plans are sold by private insurers, but the plans are standardized under federal rules. There are ten different plan designs (differentiated by letters, A through N), and the benefits offered by a particular plan (Plan A, Plan F, etc.) are the same regardless of which insurer sells the plan. Pricing, however, varies from one insurer to another.

There are 48 insurers that are actively selling Medigap plans in Michigan as of September 2020. Michigan does not dictate how insurers adjust premiums based on enrollees’ ages, so insurers can use attained-age rating (the most common; premiums increase as the enrollee gets older), issue-age rating (premiums are based on the age the person was when they enrolled in the plan) or community-rating (premiums do not vary based on age). Community rating is fairly uncommon in states that don’t require it, but at least two insurers in Michigan — BCBS of Michigan and UnitedHealthcare/AARP — sell community-rated Medigap plans.

Unlike other private Medicare coverage (Medicare Advantage plans and Medicare Part D plans), there is no annual open enrollment window for Medigap plans. Instead, federal rules provide a one-time six-month window when Medigap coverage is guaranteed-issue. This window starts when a person is at least 65 and enrolled in Medicare Part B (you must be enrolled in both Part A and Part B to buy a Medigap plan).

People who aren’t yet 65 can enroll in Medicare if they’re disabled and have been receiving disability benefits for at least two years, and 17 percent of Michigan Medicare enrollees are under age 65. Federal rules do not guarantee access to Medigap plans for people who are under 65, but the majority of the states, including Michigan, have implemented rules to ensure that disabled Medicare beneficiaries have at least some access to Medigap plans.

For at least twenty years, Michigan has had rules in place to ensure access to at least some Medigap plans for people under age 65. Current rules in Michigan (see MCL 500.3831, updated as of March 2019, to MCL 500.3831.amended) require Medigap insurers that also sell major medical health insurance to make Medigap Plans A and G (prior to 2020 this was Plan C) continuously guaranteed-issue for Medicare beneficiaries under age 65, although they can charge these enrollees higher premiums. And if the applicant did not already have major medical coverage under a plan offered by that insurer, the insurer can impose a pre-existing condition waiting period of up to six months [see MCL 500.3831(2)]. As of 2020, there are five insurers in Michigan that offer Medigap policies (at least A and G) to people under age 65.

Disabled Medicare beneficiaries have access to the regular Medigap open enrollment period when they turn 65. At that point, they can select from among any of the available Medigap plans on the market, and get the lower premiums that apply to people who are aging into Medicare, rather than qualifying due to disability.

Disabled Medicare beneficiaries can choose instead to enroll in a Medicare Advantage plan. And as of 2021, this includes people with end-stage renal disease (ESRD, or kidney failure); prior to 2021, beneficiaries with ESRD could not join an Advantage plan unless there was an ESRD special needs plan available in their area, so the federal rule change as of 2021 has helped to make Medicare Advantage plans much more accessible to people with ESRD. Medicare Advantage premiums are not higher for those under 65. But Advantage plans have more limited provider networks than Original Medicare, requiring members to use providers within a fairly localized network. and total out-of-pocket costs can be as high as $7,550 (as of 2021) per year for in-network healthcare, plus the out-of-pocket cost of prescription drugs.

Although the Affordable Care Act eliminated pre-existing condition exclusions in most of the private health insurance market, those rules don’t apply to Medigap plans. Medigap insurers can impose a pre-existing condition waiting period of up to six months if you didn’t have at least six months of continuous coverage prior to your enrollment. And if you apply for a Medigap plan after your initial enrollment window closes (assuming you aren’t eligible for one of the limited guaranteed-issue rights), the Medigap insurer can consider your medical history in determining whether to accept your application, and at what premium.

Medicare Part D in Michigan

Original Medicare does not provide coverage for outpatient prescription drugs. More than half of Original Medicare beneficiaries have supplemental coverage via an employer-sponsored plan (from a current or former employer or spouse’s employer) or Medicaid, and these plans often include prescription coverage.

But Medicare beneficiaries who do not have drug coverage through Medicaid or an employer-sponsored plan need to obtain Medicare Part D in order to have coverage for prescriptions. Part D can be purchased as a stand-alone plan, or as part of a Medicare Advantage plan with integrated Part D prescription drug coverage.

There are 29 stand-alone Part D plans for sale in Michigan in 2020, with premiums that range from about $7 to $109/month. Private insurers provide the Part D plans.

Nearly 1.7 million Medicare beneficiaries in Michigan — about 80 percent of the state’s total Medicare population — had Medicare Part D prescription coverage as of September 2020. The majority had coverage under stand-alone Medicare Part D plans, but nearly 625,000 people had Part D coverage as part of their Medicare Advantage plans.

Medicare Part D enrollment follows the same schedule as Medicare Advantage. Beneficiaries can select a Part D plan when they first enroll in Medicare, and then they have an annual opportunity (October 15 to December 7) to switch to a different Part D plan. It’s important for enrollees to compare the available Medicare Part D plans each year, to see how the various plan options would cover their current prescription drugs and to determine whether they can save money by switching to a different Part D plan for the coming year. If you secure coverage during the fall enrollment period, it will take effect on January 1.

Medicare spending in Michigan

When we look at costs for Medicare in Michigan, Original Medicare’s average per-beneficiary spending in Michigan was a little higher than the national average in 2018, at $10,301. That figure is based on data that were standardized to eliminate regional differences in payment rates, and did not include costs for Medicare Advantage. Nationwide, average per-beneficiary Original Medicare spending stood at $10,096.

Medicare’s per-enrollee spending in Louisiana was the highest in the nation, at $11,932, which was 18 percent higher than the national average. At the other end of the spectrum, per-beneficiary Medicare spending was lowest in Hawaii, at just $6,971.

How does Medicaid provide financial assistance to Medicare beneficiaries in Michigan?

Many Medicare beneficiaries receive financial assistance through Medicaid with the cost of Medicare premiums, prescription drug expenses, and services Medicare doesn’t cover – such as long-term care.

Our guide to financial assistance for Medicare enrollees in Michigan includes overviews of these programs, including long-term care coverage, Medicare Savings Programs, and eligibility guidelines for assistance.

Medicare in Michigan: Resources for beneficiaries and their caregivers

To learn more about Medicare in Michigan, you can contact MMAP, the Michigan Medicare/Medicaid Assistance Program, with questions related to Medicare coverage in Michigan.

The Michigan Department of Insurance and Financial Services is a state resource that can provide information, assistance, and customer service for a variety of issues related to health insurance. The Department oversees and licenses the insurers that offer health plans in the state, as well as the brokers/agents who sell the policies.

The Medicare Rights Center is a nationwide service, with a website and call center, that can provide information and answer questions related to Medicare eligibility, enrollment, and benefits.

Learn about programs offered via Michigan Medicaid that can help Medicare beneficiaries who have limited income and assets.

Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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